Welcome to Saturday, team. I’m Phil Rosen — today I’m sharing my conversation with an expert from the Mortgage Bankers Association on the outlook for housing and the lack of affordability.
Home for sale. Joe Raedle / Getty Images
Edward Seiler is the associate vice president for housing economics at the Mortgage Bankers Association. This conversation has been lightly edited for length and clarity.
Phil Rosen: The MBA’s Purchase Applications Payment Index just hit a new high in April. What does this mean exactly?
Edward Seiler: It’s really an index for new homebuyers, and it’s relative to income.
This hit a new record because not only have interest rates not retreated from the high 6s, but the typical mortgage application amount has jumped — all faster than incomes have grown.
Can you break down what this means for Americans looking for homes?
ES: The gauge shows housing affordability is the worst it’s ever been since we started the series in 2009.
For new home buyers, this is the worst situation since the end of the Great Recession.
Current homeowners that were lucky enough to get a 2.75% interest rate in 2022 are in a great position, but for new buyers looking to buy a first home, or those looking to move to another home, it’s a very daunting proposition.
What do you think of Seiler’s housing analysis? Let me know.
And here are the top stories from markets this week:
Jen-Hsun Huang, CEO of Nvidia Corp., gives a keynote presentation during the GPU Technology Conference in San Jose, California. Huang later unveiled the Titan X CPU operating with a GeForce GTX Titan X graphics card during the presentation. Kim Kulish/Corbis/Getty Images
1. The housing market is staring down a “chicken and egg” problem — and experts think it could lead to home price declines as soon as this summer.
2. A 30-year fund manager veteran shared the AI companies he’s most excited about. Gregg Fisher oversees $1 billion in assets, and he’s warned against picking names just because they have “AI” in their name. Here’s his strategy for nailing assets in the space that have the most potential over the next five years.
3. Short sellers have lost more than $13 billion betting against these AI stocks this year. Losses have been triggered not by so many people being caught on the wrong side of a move, but instead by massive rallies in just a handful of names. View which five trades got hit hardest.
4. Nvidia has been the clear winner in the AI race so far. The stock is up triple-digits this year, and CEO Jensen Huang has added billions to his net worth. Here’s why it’s poised to lead the way for years to come.
5. The Treasury Department plans to sell $123 billion in T-bills right on the X-date. It’s a tentative auction, officials said, based on whether Congress does in fact lift the debt ceiling in time.
6. China’s markets point to a sluggish economy and a weak rebound. There’s been no post-pandemic resurgence yet, and futures prices on obscure commodities tell the story. Read more.
7. The US dollar remains overbought and it could weaken to recent lows. The June Fed meeting will have a heavy influence on the greenback’s strength, and one analyst warned that, ahead of any policy decisions, it could pull back against the euro and yen.
8. Tech stocks are booming in 2023, but three names in particular stand out. Evercore’s Mark Mahaney said Meta, Uber, and Amazon present key buying opportunities that shouldn’t be passed up. Full details.
9. Economist David Rosenberg anticipates cooling in the housing sector. In his view, monthly payments for first-time buyers are up roughly one-third compared to last year — and that’s going to keep buyers on the sidelines and weigh on demand.
10. A fund manager who’s beaten 99% of the competition broke down his stock-picking strategy. Pinning down quality while avoiding a high premium takes diligence and knowing what to look for, Larry Pitkowsky said. See his approach — and the six names he likes most now.
Edited by Max Adams (@maxradams) in New York.